A 21-year-old Boston student convicted of stealing more than $7.5 million in cryptocurrency from 40 people has been sentenced to 10 years in prison by a Santa Clara County Superior Court judge, prosecutors said Monday. Joel Ortiz is one of the first people in the country to be sentenced for stealing cryptocurrency by hacking a victim’s cellphone, according to the district attorney’s office. The digital currency is not connected to a central bank and is regulated through online encryption. Ortiz, who was sentenced Friday, pleaded no contest to 10 felony theft charges in January after stealing more than $5.2 million from a Cupertino cryptocurrency entrepreneur in May 2018, in addition to one other victim in Santa Clara County.
He was arrested at Los Angeles International Airport in 2018 as one of five people implicated in the ongoing cellphone scam. Prior to his arrest, he was on a full-ride scholarship to the University of Massachusetts.
Deputy Public Defender Dennis Dawson said on Friday that the 10-year sentence was “insanely, ridiculously too high.”
The county probation department had recommended a prison term of a year or less, Dawson added, but Ortiz was denied due to the amount of cryptocurrency he stole.
Ortiz had been diagnosed with a developmental disability as a child and had autism, and Dawson said he was likely taken advantage of due to his naivet. He said Ortiz had no friends, except for those he met on the internet and ultimately led him into the scam.
“They gave him the most dangerous job, in that it was the most easiest to get caught,” Dawson said of Ortiz’s international co-conspirators.
Prosecutors said police were only able to recover $400,000 of the stolen cryptocurrency, and said the rest of the money was either hidden or spent “lavishly,” including $10,000 expenses at Los Angeles clubs, helicopter rides to music festivals and designer clothing.
“These are not Robin Hoods. These are crooks who use a computer instead of a gun,” Deputy District Attorney Erin West said in a news release. “They are not just stealing some ethereal, experimental currency. They are stealing college funds, home mortgages, people’s financial lives.”
Dawson pushed back on the claim, saying prosecutors “paraded” social media images of the spending in front of the judge, but the crime was nonviolent and the purchases should not have affected sentencing. He also said Ortiz came from a low-income background, and lived with his mother in Section 8 housing during college.
“That’s what kids do. They put everything on Instagram, they want to make themselves look cool,” he said. “When you’re a nerdy kid with developmental issues like Joel, looking cool is probably one of the goals.”
A restitution hearing is scheduled for May 17, but Dawson said Ortiz will likely never be able to get a job or pay out the amount in full. In addition to the cryptocurrency thefts, prosecutors said Ortiz took over social media accounts and traded them for Bitcoin. The suspects used illegal SIM card swaps to obtain the cryptocurrency. They would call telecom companies pretending to have lost their SIM card, and ask that the number be transferred to a new phone. To prove their identity, they would use stolen social security numbers or addresses.
Other suspects have been arrested in the scam and are currently facing trial, but Ortiz is the first one to be sentenced to prison time.